"Wilbur Hubbard" wrote:
It is NEVER cheaper to borrow than to pay cash.

Malarkey.

If I have $X invested in a bond fund that is earning 8% interest (and
helping businesses produce goods & services, providing employment etc
etc); and I can borrow $X at 6% interest, then I would be stupid to
cash in bonds to buy anything.

Better yet, if I can borrow money interest free, such as on a credit
card which will be paid in full at the end of the month, then I can
leav money in my interest-bearing checking account longer and gain
more interest accrued to me.

That's not to mention the use of credit to acquire capital goods for
production of wealth at a higher rate than the interest charged.

If it were not for the *intelligent* use of credit, we would still be
living in caves or perhaps thatched huts.



..... But who borrows without
usury these days?


You're confused.

1- interest rates are near historic lows.

2- usury is the charging of excess interest, it has nothing to do
with the borrower.

DSK

wrote in message
oups.com...
"Wilbur Hubbard" wrote:
It is NEVER cheaper to borrow than to pay cash.

Malarkey.

If I have $X invested in a bond fund that is earning 8% interest (and
helping businesses produce goods & services, providing employment etc
etc); and I can borrow $X at 6% interest, then I would be stupid to
cash in bonds to buy anything.

Oh my gawd, yet another brainwashed sucker whose bubble I must break.

If your bond fund returns 8% then you will not be able to borrow at 6%
interest.
Not possible. Nobody who's sane is going to lend you money to you at 6%
when they can lend it to an institution and get 8% for it.


Better yet, if I can borrow money interest free, such as on a credit
card which will be paid in full at the end of the month, then I can
leav money in my interest-bearing checking account longer and gain
more interest accrued to me.

You seem to have forgotten all about the credit card service charge. I'm
afraid you will pay them more than any interest bearing checking account
will pay you.
Credit card companies aren't stupid. Why would they bother to give you a
card when they could do just what you suggest doing? They'd simply cut
out the middle man.


That's not to mention the use of credit to acquire capital goods for
production of wealth at a higher rate than the interest charged.

Voodoo math. It only works if you leave out production costs...

If it were not for the *intelligent* use of credit, we would still be
living in caves or perhaps thatched huts.

Negative, sarge. All the wealth you see in the hands of the credit card
companies would be evenly distributed among the general population.

You're confused.

1- interest rates are near historic lows.

2- usury is the charging of excess interest, it has nothing to do
with the borrower.

You're confused. Usury is just another name for interest. Any rate of
interest is usury. Interest rates are near historic lows. I agree. They
go in cycles. What ALWAYS remains constant is the borrower is charged
higher interest for borrowing than he receives for investing. The man
who wishes to get rich lends. That's a fact.

Wilbur Hubbard

"Wilbur Hubbard"

You seem to have forgotten all about the credit card
service charge.

Service charge? WTF?

I'm
afraid you will pay them more than any interest bearing
checking account
will pay you.

WRONG!


Credit card companies aren't stupid.

No, but they're greedy. One can take advantage of this if
one knows how. Obviosly you don't.




Voodoo math.

Translation; I don't understand it.



What ALWAYS remains constant is the borrower is charged
higher interest for borrowing than he receives for
investing. The man
who wishes to get rich lends. That's a fact.


Your fact is WRONG!

SBV

If I have $X invested in a bond fund that is earning 8% interest (and
helping businesses produce goods & services, providing employment etc
etc); and I can borrow $X at 6% interest, then I would be stupid to
cash in bonds to buy anything.

"Wilbur Hubbard" wrote:
Oh my gawd, yet another brainwashed sucker whose bubble I must break.


Go ahead

If your bond fund returns 8% then you will not be able to borrow at 6%
interest.

Wrong.

In fact, there are many bond funds paying upwards of 9% on high grade
commercial paper (ie no junk bonds). One can relatively easily get a
house mortgage at 6.5%

http://finance.yahoo.com/q?s=AHITX
scroll down and check the 5 year average return. And that's one of the
big house plain vanilla bond funds.

Not possible. Nobody who's sane is going to lend you money to you at 6%
when they can lend it to an institution and get 8% for it.


Go talk to "them" because "they" are doing exactly that.



Better yet, if I can borrow money interest free, such as on a credit
card which will be paid in full at the end of the month, then I can
leav money in my interest-bearing checking account longer and gain
more interest accrued to me.

You seem to have forgotten all about the credit card service charge.

Wrong again. Perfect record!

If one pays his credit card bill before interest charges accrue, then
one does not pay interest. On my credit card bill, under "interest"
and "service charge" there is a big fat ZERO.



..... I'm
afraid you will pay them more than any interest bearing checking account
will pay you.

Oh, don't be afraid. It's not manly.


Credit card companies aren't stupid. Why would they bother to give you a
card when they could do just what you suggest doing? They'd simply cut
out the middle man.


Because then they wouldn't be a "credit card company" they'd be
arbitragers. And for those who *don't* pay their bill in a timely
manner, interest rates are higher yet. A very expensive way to borrow
money.


That's not to mention the use of credit to acquire capital goods for
production of wealth at a higher rate than the interest charged.

Voodoo math. It only works if you leave out production costs...


Spoken from your years of experience as a CEO.

Guess what, just about all the business world makes a profit by
borrowing money. What do you think stocks & corporate bonds are all
about?

If it were not for the *intelligent* use of credit, we would still be
living in caves or perhaps thatched huts.

Negative, sarge. All the wealth you see in the hands of the credit card
companies would be evenly distributed among the general population.


So you're a Marxist now?



You're confused. Usury is just another name for interest.


Ummm, no.

Any rate of
interest is usury.

Wrong.

Go look it up.

And "Usury" is still a demerit to the kender, the one who charges
usuriously, not the borrower.


.... What ALWAYS remains constant is the borrower is charged
higher interest for borrowing than he receives for investing.

Nope. Done it for years. I guess you think the earth is flat, too.
Careful you don't sail off the edge!

DSK